If your neighbor sells a truckload of cattle to the packer for $78 per live hundredweight, do you think you should be offered the same price, even if your cattle are not as high in quality? What if it is a day later? And should the packer be required to buy your cattle even if they had reached full slaughter capacity?

Under a Missouri state law that went into effect May 29, 2001, any meatpacker buying livestock in that state would be required to pay the same price for the livestock they buy and make the prices public. Amendments to the law say it is not to be construed to mean that a price or payment method must remain fixed throughout any marketing period, but opponents of the law say the requirements for assigning equal value are too vague.

As a result of the Missouri Livestock Marketing law, IBP officials have determined they will no longer be able to negotiate with Missouri producers on a cash market price for their hogs and cattle. Instead, IBP will only purchase livestock for slaughter on a grade-and-yield basis, with a single fixed price each day. This means the producer's payment won't be known until the animal's carcass value is determined.

“While our buyers do an excellent job estimating the value of the livestock they buy, this vague and confusing new law opens the door for legal challenges by producers alleging they have not been offered enough,” according to Gene Leman, chief executive officer of IBP Fresh Meats. “For example, the law ignores how quickly the market can change due to supply and demand and other factors such as weather, while forcing the packer to pay one price regardless of changing market conditions.”

The law also impacts public livestock auctions. It essentially forces packers out of Missouri auctions since it appears to eliminate livestock bidding, prompting them to only buy hogs and cattle directly from livestock producers. For example, if a packer buys a group of cattle at an auction for one price, then buys more at another price the packer must justify the difference. Difficult if not impractical due to the subjective nature of live evaluation. The law also implies that once animals are bought at one price it must be offered to all other producers.